British savers duped into bogus pension schemes to the tune of £495m

Britons saving for their retirement are being urgently warned to avoid falling victim to pension scams.

According to the Pensions Regulator, the amount of funds paid into hoax pension schemes now stands at an eye-watering £495m.

However, more worryingly, it is suspected that this amount is likely to be substantially higher as not all activity is reported.

Victims of pension scams have warned of the devastating impact of losing thousands of pounds in retirement savings as a result of being conned into moving their savings into unregulated high-risk or bogus investments.

The Pensions Regulator, highlighted one 49-year-old scam victim, who is potentially facing an £18,000 tax bill and risks losing her home after being persuaded into a ‘pension loan’ scam.

She said: “These scams target vulnerable people. I feel very angry that I have been misled. Ignore the sales patter, ignore the glossy websites, ignore the cold calls and text messages. Go to an independent financial adviser – speak to an expert.”

As part of the Government awareness drive, the Pensions Regulator has refreshed its campaign material to reinforce the message to consumers not to be ‘stung’ by cold calls, text message spam or website offers claiming to be able to help them cash in their pension. The regulator is urging pension trustees and providers to include the leaflet in the next annual statement sent to members, and anyone who requests a transfer in the meantime.

Pensions minister Steve Webb warned: “Although quick-fix pension release schemes may seem tempting, particularly when times are tough, people should make sure they understand all the implications before they sign on the dotted line.

“A joint industry and Government operation is working to stamp out these unethical, exploitative, poor value offers – but I would urge anyone who is approached to think carefully, consider seeking advice and, if in doubt, steer clear.”

The Pensions Regulator’s executive director, Andrew Warwick-Thompson added: “Pension scams remain prevalent and need to be stamped out. We have seen victims lose their entire pension savings by signing up to these offers. If you are approached by someone claiming to be offering advice or that they can help you move a frozen pension, don’t get suckered. You could be left with nothing for retirement, you will not be compensated, and you may have to pay fees and a high tax charge. The only people who benefit financially from the arrangements are the scammers themselves.”

The new campaign is being led by the Department for Work and Pensions, The Pensions Regulator, The Pensions Advisory Service, Money Advice Service, Financial Conduct Authority, Serious Fraud Office, HMRC, Action Fraud, National Crime Agency and City of London Police.